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Brazil’s state-run oil firm Petrobras plans to shave another US$10 billion off its huge net debt and increase oil production by as much as 10 percent to 2.3 million bpd in 2019, chief financial officer Rafael Grisolia told Reuters in an interview published on Monday.
Petrobras benefited from the rising oil prices and reported in early August a thirty-fold yearly jump in its second-quarter net income, which also beat analyst expectations.
The heavily indebted company—the world’s most indebted oil company—cut more of its debt in the first half this year. Petrobras’ net debt stood at US$73.662 billion at the end of June 2018, down by 13 percent compared to the end of December last year.
Petrobras is on track to cut that debt to US$69 billion by the end of 2018, despite the fact that it is lagging behind with its US$21-billion asset sales goal, Grisolia told Reuters in New York.
Next year, the company expects to further reduce its net debt by US$10 billion, according to its CFO. The state-held oil firm, which has started to emerge from the huge corruption scandal, has plans to reach a net debt-to- earnings before interest, tax, depreciation, and amortization (EBITDA) ratio of 2 times in 2019, and to continue slashing debt to reach the net debt-to-EBITDA ratio of 1-1.5 times, on par with the ratios at most international oil majors.
At end-June, Petrobras’ net debt/adjusted EBITDA ratio was 2.5 times.
Petrobras currently aims to hit the 1.5 times net debt/EBITDA ratio in 2020, but reaching the goal would hinge on the price of oil and other variables, including foreign exchange rates for the Brazilian reals, Grisolia told Reuters.
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In terms of oil production, the company aims to increase output by between 8 percent and 10 percent in 2019 from the expected 2.1 million bpd production this year, the manager said.
Referring to the early October wide-open presidential elections in Brazil, Petrobras has held meetings with economic advisors to candidates, Grisolia told Reuters, but declined to comment on discussions with the candidates’ representatives or on their energy policy strategies.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.